Risk: friend or foe?

The most engrossing books/tv/movies have characters that take risks.  From Harry Potter to the Gilmore Girls to Mission Impossible to Atlas Shrugged to Laurel and Hardy to almost any biography (and beyond), characters don’t play it safe when they have choices*.  Their risk analyses are rarely intelligent, they aren’t always well-thought out, they don’t always end well and the situations are often happenstance. It is the uncertainty and consequences of these risks that make their stories so enticing.

We spend our free time engrossed in the stories of people who take risks and make bad decisions, often idolizing their off-kilter lives.  But, at our day jobs, we are taught to perform risk analyses and mitigate risk, to calculate the answer before actually acting.  This is the generally-accepted, most efficient way to do anything, and without it, investors won’t fund companies and, it seems, we won’t have products to sell.  We won’t sell Starbucks cappuccinos if they aren’t made according to the plan and rocket ships won’t launch without careful measurement.  Reading a story about someone who can’t hold a steady relationship or job is entertaining, but in our real lives, not being able to hold onto partners or build a career is a ‘flaw’.  Even the very origin of the word ‘risk’ is negative: mid 17th cent.: from French risque (noun), risquer (verb), from Italian risco ‘danger’ andrischiare ‘run into danger.’ (thanks, Google).

There is an apparent disconnect between our romanticism and fascination with the extraordinary and everyday life when we are told that we must minimize the risk.  Our fascination seems independent of the characters’ ability to weigh their options reasonably and forge the outcomes they desire.  Do we admire those who are willing to take risks because they are few and far between?  Or is it our nature to take risks but we choose not to because we evaluate situations and keep the odds of failure low?

Interestingly, it seems that Peter Drucker says, alternatively, that the origin of the word risk in arabic means “eating one’s daily bread” and are required in life and business.  He is also a proponent of logically facing risks.  It’s cliche that the greater the risk, the greater the opportunity for success.  Is the converse always true: the lower the risk, the less meaningful the success?  Low risk, high reward situations are as elusive as El Dorado.  It is key to avoid the particularly-dangerous high risk, low reward situations, I question whether there is ever a time to choose low risk, low reward over high risk, high reward.

I believe we don’t want to truly mitigate the risks we take on, but rather logically evaluate risky options, then focus our risk acceptance on the highest reward outcome (letting the low reward situations lay by the wayside).  After writing this, I found out that Mr. Drucker seems to support this  – and Mr. Drucker definitely knows what he’s talking about.

Perhaps an inability to set a goal could be re-phrased: I set up to take risks only when the outcome is great enough to be worth the investment – and often my recognition of ‘great enough’ may be too harsh, too slow, too on-the-spot or just plain old ineffective.  But, without intentional risks I don’t push myself to grow, and I’m a terribly boring movie character.

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*One exception to this rule is the books where the characters cannot bring themselves to take risks and the author points out the devastation of playing it safe (ie, RevolutionaryRoad).

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